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KIP REIT 1Q NPI up 3.7% on lower property operating expenses

KUALA LUMPUR (Oct 21): KIP Real Estate Investment Trust (REIT) saw its net property income (NPI) for the first quarter ended Sept 30, 2020 (1QFY21) rise by 3.7% to RM14 million from RM13.5 million a year ago, thanks to lower property operating expenses and better cost management.

In a filing with Bursa Malaysia yesterday, the group said a discount by Tenaga Nasional Bhd helped reduce expenses to RM4.2 million.

Meanwhile, quarterly revenue dipped to RM18.23 million from RM18.49 million a year ago, due to a RM1.6 million decrease in revenue from the southern and central regions.

"Included in the revenue of southern and central regions was the amortisation of rental rebates amounting to RM700,000 offered to non-essential tenants affected by the Movement Control Order," it said.

However, this was offset by additional revenue of one month from AEON Mall Kinta City in the northern region, which was acquired in July last year.

It noted that investment properties in the southern region, central region and northern region contributed 49.8%, 27.7% and 22.5%, respectively, to its 1QFY21 revenue.

Distributable income jumped by 62% to RM9.8 million from a year ago, due to a 65.2% increase in realised profit before tax of RM8.8 million from RM5.3 million.

It has declared a distribution per unit (DPU) of 1.55 sen, up from 1.37 sen a year ago.

The 1.55 sen DPU includes a non-taxable portion of 0.85 sen per unit derived from capital allowances and tax-exempt income.

The DPU for 1QFY21 has an entitlement date of Nov 5 and is payable on Nov 23.

KIP REIT Management Sdn Bhd managing director Datuk Chew Lak Seong said shopper traffic at its malls has gradually normalised at its properties since the beginning of the Recovery Movement Control Order in June.

"Operationally, proactive measures will continue to be taken which include adherence to standard operating procedures imposed by the Ministry of Health and supporting our tenants through active engagement in open discourse on community updates.

"KIP REIT will continue to cater for its surrounding communities by offering daily necessities and essential services.

"However, as the government reimposed the Conditional Movement Control Order from Oct 14 to 27 to curb the rising Covid-19 cases in Selangor and Sabah, we remain vigilant given the uncertainties and the impact on consumer sentiments which may cause the portfolio's performance to be flattish for the remainder of the [financial] year," Chew said.

Units in KIP REIT finished at 80 sen per unit yesterday, giving it a market capitalisation of RM404.24 million. It registered a trading volume of 50,500 shares yesterday.

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